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PRICE STUDY

WHY TO DO A PRICING RESEARCH?

 

Pricing studies give you an outlook of the current range of prices in the market for products or services of your same category, and -if adding qualitative/quantitive research- it can also reveal what customers are willing to pay for it.

This provides the necessary data to decide the optimal level of your price to maximize profit, revenue, or market share. You’re aiming to find the price point that is low enough that customers are willing to part with their money without feeling overcharged, and high enough to make sure your profit level is high enough to sustain and grow your business. It also helps you to avoid cheap prices that, while sustainable for you, may make the customer question the product’s quality.

Pricing research guides organizations on how they can increase revenues and profit margin by increasing or decreasing prices over time.

Pricing research offers the following key benefits:

  • Understand the market’s willingness to purchase

  • Capture the highest return on our product investment

  • Preserve the value of your brand

  • Make strategic decisions on how to change pricing over time

 

BENEFITS OF DOING A PRICE RESEARCH:

 

Price is the most important factor in profitability, according to a wide range of studies around the world, no matter what is the product or service you trade with, price is the first thing any consumer thinks of in either B2C or B2B segments. 

Despite this, many organizations still fail to price effectively. Most companies state that pricing is a top priority, but 85% say they have significant room to improve, according to Bain.

"With meaningful margin upside at stake, managers cannot afford to continue pricing by guesswork or rules of thumb.”

– Ron Kermisch & David Burns, Bain & Company

Companies that fail to price correctly can leave thousands or even millions on the table, however, the right pricing approach can lead to market growth. Of the top-performing companies, Bain found that 76 percent strongly agreed that their pricing strategies maximized returns at the customer and product levels.

If you want to get all the necessary data to establish your best level price in Mexico, to know your market potential, or any other relevant information related to price levels, approach us at mag@agapemr.com

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